Eskom power station stripped for scrap

Monday, February 2, 2015

Pietermaritzburg - As renewed loadshedding plunged millions of South Africans into darkness on Monday, embattled power provider Eskom was stripping a KwaZulu-Natal power station for scrap, The Witness reported on Tuesday.

The Ingagane power station in Newcastle — once the gem of the province’s electricity generation arsenal — has been reduced to junk.

The Witness can reveal that the power station’s life span could have been extended by 20 years — allowing the generation of electricity well into 2016 — had it been properly maintained.

The coalfired power station generated 500 MW, about a quarter of Johannesburg’s power requirements. By way of comparison, Eskom implements Stage 1 of load shedding to shed 1 000 MW.

Now, as the country is gripped by its worst power crisis since 2008, Ingagane will be relegated to the scrap heap, along with Eskom’s other disposable assets, in a bid to ease the power utility’s financial troubles.

Eskom needs a funding solution by September, or it faces the threat of a credit downgrade that would raise the cost of its borrowings.

Consumers could also be faced with a steep tariff hike if its application to the National Energy Regulator of South Africa (Nersa) is successful.

Ingagane, which was completed in 1963, was the largest of KZN’s four power stations.

According to Eskom’s website, a decrease in the demand for electricity during the 1980s and early 1990s, and the commissioning of new larger power stations, resulted in excess generating capacity.

“Consequently, the older power stations were no longer required and Eskom decided to store certain of them. Eleven stations altogether were going to be put into storage or mothballed.

Eskom decided that Ingagane power station would be mothballed in 1990 and brought back into service in 1996, when it was anticipated that it would be economically viable to do so. The power station was estimated to have a service life of a further 20 years with proper maintenance,” it reads.

“In 1994, it was no longer deemed necessary or viable for Eskom’s Integrated Electricity Plan. The decision was taken to dispose of it.”

However, Eskom failed to sell the power station to several European companies that expressed interest, and the massive steel hulk now stands idle on the outskirts of Newcastle, a stone’s throw from a colliery that once supplied it.

The only activity comes from industrial cranes which have slowly removed a façade. Energy specialist Chris Yelland said the process of mothballing was arduous.

“Bringing a power station back to service depends entirely on how well it was maintained when it was mothballed. You need to take great care, and if not corrosion sets in and assets get stripped for spares at other stations.

“Equipment needs to be kept in pristine condition and they need to keep turning over regularly, and if not they just go to waste. After a while they are beyond repair,” he said.

Yelland said the fact that Ingagane is being stripped for scrap is an indictment of its value.
“Some of the items they may be able to sell if things still work. This is not a major revenue spinner. The name of the game is economics and Eskom needs to box clever now,” he said.

Retired engineer and energy commentator David Easton said a deal to sell the station in the 1990s had collapsed.

“This was the most recent power station to be closed. Another idea was to sell it to an independent power producer, but that fell on its head. The only way to get private power producers is to have them start from scratch,” he said.

“This is the ideal way forward for Eskom; the state cannot administer its assets and among them are their power stations,” he added.

Energy department regional manager Tasco Mbinda referred all queries to Eskom. Eskom has not responded to questions.